Wozniak to Zuckerberg - watch your back

Admiration ... Apple co-founder Steve Wozniak has high praise Facebook chief Mark Zuckerberg’s openness and idealism and would buy the social network’s stock because of the “deeper symbolic meaning” of the company’s listing.
Photo: Nic Walker

Apple co-founder Steve Wozniak has warned Facebook founder
Mark Zuckerberg
about the dangers of going public and being exposed to the demands of shareholders.

“All of a sudden you have shareholders that are directing the company and demanding answers and getting upset if things aren’t going as well as they hoped," Mr Wozniak said.

Speaking to The Australian Financial Review after hosting a seminar in Sydney on Monday morning, he said he was glad Mr Zuckerberg had held out from going public for so long, “because once you go post-IPO, all of a sudden Mark Zuckerberg can be more at the mercy of the owners".

“That is something to worry about and something they have to watch out for, but I think he has got a strong enough focus to continue on as he has been going, and I really hope it goes well for them."

The long-awaited Facebook IPO is expected to take place on Friday, amid estimates the social networking company founded by Mr Zuckerberg in 2004 will be valued at almost $US100 billion.

Some doubts about the long-term prospects for Facebook have hinged on the perception that the company has thrived because it is privately held.

The view is that Mr Zuckerberg has been able to drive the business in line with his own vision, rather than worrying about failing with investors’ funds.

Mr Wozniak said some of the happiest times of his career with Apple were before its listing, when a small group, including him and Mr Jobs, made decisions based purely on the motivation of making the best possible product, rather than impressing stakeholders.

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Mr Wozniak lavished praise on the drive and idealism of Mr Zuckerberg and said the success of the Facebook IPO would be very important for the internet industry and for inspiring a new generation of entrepreneurs.

The man who helped start Apple with Steve Jobs in his garage said he would love to be a first-up investor in the offering, regardless of the initial asking price.

Mr Wozniak said that while a lack of deep financial knowledge meant he was in no position to judge the right stock price, he would be keen to buy into Facebook, because he believed the listing had a “deeper symbolic meaning".

“I admire Mark Zuckerberg so much," Mr Wozniak said.

“I think he is still able to think like a young idealistic person and is making decisions about what he thinks is right and wrong. He is genuinely more focused on openness and what people are getting from using Facebook, than he is on the money.

“It is really obvious for someone like me to look and see that."

Dissenting voices are starting to be heard before the listing on the US Nasdaq exchange.

Bloomberg reported that a global poll of 1253 investors, analysts and traders found 79 per cent believed Facebook was not worth $US96 billion.

Some expressed doubts about Facebook’s ability to sustain its growth rate, and the risks of a sudden decline in its popularity among fickle web users.

Oppenheimer & Co investments director Bob Rich told Bloomberg that at the high end of a projected range of $US28 to $US35 a share, Facebook would be valued at 99 times its earnings, a higher multiple than 99 per cent of companies in the Standard & Poor’s 500 Index.

Meanwhile, Facebook co-founder Eduardo Saverin, who owns about 4 per cent of the company, has renounced his US citizenship, in a move apparently aimed at reducing his tax bill.

The Brazilian-born 30-year-old is a resident of Singapore and said it would be more practical to become an offficial Singapore resident as he intended to live there for an indefinite period of time.

US media reports said that a record 1780 people gave up their US passports last year, compared with 235 in 2008, before a rise in the income tax rates of the country’s highest earners next year.